Online Business in Pakistan
Syed Afraz and Hiba Ibrahim
Electronic Commerce
Electronic commerce, or ecommerce, is the business done
through the internet.
It is the activity of buying or selling of goods over the
internet.
Online businesses are becoming very common and
convenient around the world.
Pakistan has also entered the online business market and
has developed ecommerce websites.
This has worked in the favor of many businesses in
Pakistan, but some businesses are still facing a lot of
challenges such as literacy issues, lack of trust, costs and
delivery, payment issues and the nature of the Pakistani
public.
Literacy Issues
The literacy rate of Pakistan is 54% out of which 50% are computer
illiterate, and there are 75% of illiterate people who have no
knowledge of the internet, therefore, they do not have access to the
ecommerce websites.
These are used by a very small number of people since majority of
the population does not own a computer due to rising computer costs.
There is an even smaller population that is engaged in online
shopping.
If the costs of computer hardware go down, more people can buy the
computers and have access to the internet which will improve the
online business market.
Cheap and reliable internet connections with high speed will also
prove to be in favor of the usage of the ecommerce websites.
Lack of Trust
People have trust issues in buying products which they cannot
see or touch.
They only buy a product online if they are already familiar with
the brand or if they have heard positive reviews. It is very rare
that they buy new products online without prior information.
In other countries, online shopping is preferred over physical
shopping because it is considered as a time saving option, but
people in Pakistan prefer to go to malls or outlets rather than
shopping online.
They don’t trust these websites with respect to their private
information like credit cards, phone numbers, addresses etc.
Online businesses should have support and guarantee by the
government or other trustworthy companies so that these fears
are reduced.
Costs and Delivery
The main purpose of an online business is to reduce the
operating costs while also satisfying customer needs.
Businesses are lowering their costs in any way they can by
maintaining their inventory stock and delivering requests
but they fail to maintain credibility.
This is because their transport system for delivery of goods
is very much unreliable since they employ local transport
companies.
They do not guarantee a time based delivery to customers
and with fewer sales, more costs are incurred.
Reliable, cheap and quick transportation channel should be
established by these businesses to distribute products faster
and effectively.
Payment Issues
People have major trust issues when confiding in online
businesses.
Most businesses ask for online payment rather then cash on
delivery (COD) that is a barrier to growth.
Very few people in Pakistan own a credit card, since most
people use cash for their day to day transactions and without a
credit card, they cannot purchase online which is a loss of sale
for the business.
People who do own credit cards have a hard time in trusting
websites with their personal information unless it is a
renowned brand and one that they trust.
Businesses should keep an open option for online payment as
well as COD.
Nature of the Public
The nature of the Pakistani society is very traditionalistic.
They do not buy products that they cannot feel or touch, and
they do not believe in the online payment system since
Pakistanis resist to change.
Pakistan has a relationship-oriented society where people
mostly form relationships with family businesses and maintain
their long term associations rather than trying out new brands.
People are also accustomed to the practices of product return
and exchange which is a service that online businesses do not
provide.
This makes people uncomfortable and insecure in buying
goods online.
Online businesses should have a return and exchange policy in
order to grow the market.
Pakistan’s Ecommerce Players (types)
Multi retailer platform: These are the dominant forces in the ecommerce
industry having a wide collection of products listed on their websites.
Examples of these platforms are Daraz, Symbios, Food panda, Bookme.pk,
Yayvo, Goto, Well.pk etc.
Niche retailers: They focus on one niche and try to leverage their specialty to
drive sales. Examples are online stores like Higher.com.pk and
Babynestboutique.com etc.
Companies having their own online stores through which orders can be
placed. Retailers like Gul Ahmed and Khaadi are good examples of this
category.
Facebook/social media retailers have very well established Facebook stores or
groups. Examples are Facebook business pages (shops) like Karachi Buy &
Sell. Usually housewives and traders who want another avenue of sales make
up the bulk of this segment.
Opportunities, Benefits and Ideas of Ecommerce in
Pakistan
COVID-19 & E-COMMERCE:
Chinese digital company Timesaco has launched an e-commerce platform
‘Dazaran’ to provide a facility to the people in the current challenging situation
of the Covid-19 pandemic.
BECOME AN INTERNATIONAL E-COMMERCE CHAMPION TO
INCREASE EXPORTS:
Online shops across country borders, are the most important area to be worked
on by developing countries like Pakistan.
ISSUANCE OF DIGITAL CURRENCY BY SBP:
The SBP has announced issuance of digital currency by 2025. So this will also
encourage the investors and businessmen to contribute easily across the
borders of Pakistan.
E-COMMERCE AND TOURISM:
E-commerce offers Pakistan the opportunity to participate in value chains for
global tourism and have fair access to international tourism markets on the
Internet.
Benefits from ecommerce
E-COMMERCE FOR JOB CREATION:
Increased use of digital financial service, 4 million jobs can be
created by 2025 by Pakistan and it can increase its GDP by $36
billion.
E-COMMERCE AS A RESOURCE TO HELP REDUCE
POVERTY:
Developing financial services for rural areas through Ant
Financial (Alibaba subsidiary)
Establish a network of E-commerce services in counties and
villages
Improve logistical links for villages by shipping "two-stage
delivery" packages from county to village centers
Provide e-commerce training for employees
Promote entrepreneurship
Major Ideas to start Online Business in
Pakistan
Meal sharing company
Blogging
YouTube channel partner
Sell creative products online
Online tutoring
Consulting services
And etc…….
THANKYOU
